Foreclosure Auctions At The Courthouse Steps
Once the bank has foreclosed the home – it will try to sell it at auction on the courthouse steps. This is a very difficult way for most investors to buy property, because they must come to the courthouse with enough cash to buy the property the same day (they can’t apply for a mortgage from a traditional lender), and they can’t enter the property ahead of time to tour and inspect it and see what it looks like inside. So, it’s kind of a gamble for investors to try to buy houses at foreclosure auctions.
If you want to try it, you can visit the Snohomish County courthouse in Everett and see the property auctions live on Friday mornings.
The Foreclosure Property May Become An REO (“Real Estate Owned” By The Bank)
If no investor is able or willing to buy the house at foreclosure auction at the courthouse steps, then the bank will take the property back. Now, the property is owned by the bank and it will need to work with a listing agent in order to sell it to somebody else.
Foreclosure Properties Are Vacant And Can Be Ugly And In Need Of Repair!
Usually bank owned properties have all the electricity shut off, sometimes with windows boarded up to prevent damage from squatters or vandals, and usually the water pipes have been “winterized” so they don’t freeze, and you can’t run the water or use the toilet in the home. If you are going out to look at bank owned properties, it’s a good idea to bring a flash light and be prepared for the unexpected.
Many REO homes are in need of extensive repair. Some may have structural damage in the foundation or roof. Others could have mold or moisture issues. Almost all need at least paint and new carpet, and often times new kitchen and bathroom cabinets. Whoever buys the home from the bank may need to invest several months and tens of thousands of dollars in rehab costs in getting the home fixed up for resale on the MLS. In order to account for this time, money and risk the investor expects to make a reasonable profit.
Many rehab investors, or “house flippers” as they are sometimes called, are working full time in the real estate industry and need to make enough money to support themselves and their families with their projects. If you are entering the marketing and starting to look at buying foreclosure properties for sale in Seattle, WA, it’s a good idea to get a sense of how you will be funding the project before you start making offers.